I discuss the multifaceted economic and financial vulnerabilities that have been created or exacerbated by COVID-19 pandemic on a foundation of already weak fundamentals in many countries. Crises often do not travel alone. Banking, sovereign debt, exchange rate crashes, sudden stops, inflation intersect to become severe conglomerate crises. Historically, whether individual variety, crises influ...

We investigate the misallocation of credit in Japan associated with banks’ evergreening loans, distinguishing between two types of firm distress: (perhaps temporary) financial distress and technical distress, which reflects weak operational capabilities, as indicated by low total factor productivity. We show that previous evidence related to firms’ financial health is problematic...